How To Use Fibonacci Ratios in Analysis of Commodities and Financial Markets

By: EWI

What tools help you with the difficult task of identifying the market trend, riding it, and getting out before it reverses?

Consider Fibonacci ratios: Mathematical proportions by which moves on a market chart relate to each other.

Fibonacci mathematics is an integral part of Elliott wave analysis; Frost & Prechter's classic "Elliott Wave Principle -- Key to Market Behavior" has an entire chapter on it.

And here's an excerpt from a free Club EWI report on the subject. Enjoy -- and for details on how to read the entire report free, look below.

How To Apply Fibonacci Math to Real-World Trading

 

(excerpt; full copy here)
By Jeffrey Kennedy
EWI Senior Tutorial Instructor
EWI Senior Commodity Analyst

It’s hard to imagine a wrong way to apply Fibonacci ratios or multiples to financial markets, and new ways are being tested every day. Let’s look at just some of the ways that I apply Fibonacci math in my own analysis. ...

Elliotticians often calculate Fibonacci extensions to project the length of Elliott waves. For example, third waves are most commonly a 1.618 Fibonacci multiple of wave one, and waves C and A of corrective wave patterns often reach equality (Figures 7-3 and 7-4).

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